Services Of General Economic Interest Research Articles

PUBLIC POLICIES TO REDUCE SWITCHING COSTS LINKED TO MANDATORY ACCESS TO CERTAIN ELEMENTS OF THE POSTAL NETWORK IN THE EU AND THE EFFECTS OF THE RETENTION COSTS

Purpose: Our objective is to examine the switching costs that exist in the European postal service, where an ambitious process of opening up to competition has been carried out since 1997, as well as the different types of retention costs.   Theoretical Framework: The theoretical framework is determined by the sectoral regulatory framework regarding the liberalization of services of general economic interest in the EU, the experience of postal operators in recent decades and the changes experienced in the demand for postal services in the current context of profound technological change in the field of communication.   Design/Methodology/Approach: This research work is carried out through a systematic review of the relevant specialized literature, the study of the policy decisions adopted in the EU, the changes in the strategies of postal operators and the rigorous analysis of the evolution of the demand of the postal services in a context of rapid and profound change.   Finding: Inadequate regulation of the access to some elements of postal infrastructure or services within the scope of the universal postal service, such as the postcode system, address database, post office boxes, delivery boxes, re-direction and retour to sender service, can generate switching costs and thus limiting competition, with negative effects on the consumer surplus and social welfare. Standardization and access to these elements may be regulated separately   Research, Practical & Social Implications: This article proposes solutions to the technical functions of coordination between operators. Our proposals are in line with sectoral directives aimed at strengthening competition in the long term in the postal market.   Originality/Value: A correct classification of the change costs applied to the liberalized postal service is made. Likewise, a classification of retention costs. We must underline the progress that our proposals represent to reduce the costs of switching to elements of the postal network whose access is mandatory.

SUPPLY OF ELECTRICITY AS A SERVICE OF GENERAL ECONOMIC INTEREST IN THE TIME OF RISING ENERGY PRICES

The purpose of the article is to indicate the particular importance of classifying the supply of energy as a service of general economic interest in the time of the recent increase in energy prices. The analysis of the characteristics of a service of general economic interest and a universal service, in particular, its price, allows to indicate the importance of it being competitive, easily and clearly comparable, transparent, and non-discriminatory. Selected actions and measures taken both at the EU level and at the national level – in the Federal Republic of Germany – are presented. These are actions and measures which are aimed at relieving end consumers from high prices and, on the other hand, creating an incentive to save electricity.

Challenges of Defining Public Services as the Object of State Administration Activity

One of the main goals of the existence of the state, and especially its operative arm, the public administration, is the provision of public services. Through them, it is intended to fulfill the basic needs of people, which are vital for their existence and well-being. Public services are essential for the sustainable economic development of any country and at the same time ensure social cohesion. From the point of view of the law, they are considered an essential mechanism that serves to implement the principles of the rule of law, especially the social state and basic human rights. Their ever-increasing role and dimension have made every jurisdiction pay great attention to the way they are provided to effectively serve the specific rights they aim to fulfill. In Albania, there is a legal framework for over 10 years, which regulates in detail the typology, principles, way of internal organization, nature of the activity, and delegation of functions of state administration. The law defines that the main object of its activity is the provision of public services, without giving us a definition of it. Precisely, this paper gives answers to questions such as how public services should be understood, as an object of the activity of the state administration, and what are the types, ways, and principles of their provision. The paper supports the hypothesis that there is no exhaustive legal definition of the notion of services public, as an object of activity of the state administration, due to the broad, complex, and dynamic nature of the public interest embodied in the notion of public services. Community law has encouraged member states to consider public services between competition mechanisms and the legal reserve of the state. The paper assesses the great impact of community law on domestic law in terms of the categorization of services of general economic interest, the determination of the principles of their exercise, and the inclusion of market mechanisms in the provision of these services. To prove the above hypothesis, the following research questions are raised in the paper: What attitude have other jurisdictions taken about this important legal concept? Given the fact that public services of special jurisdictions can have implications for the common market, what contribution has community law made in terms of defining public services and their categorization? The study uses the desk research method, i.e. theoretical consultation with a series of legal documents of domestic, international, and special jurisdictions, articles, and scientific works that deal with issues and aspects related to public services. Also, in this paper, historical and comparative methods were used to highlight the features, differences, and impact that the law of special jurisdictions or that of the EU has had in shaping a legal framework for public services in Albania. This paper is of interest to researchers, lecturers, and students, as well as to the community of legal professionals.
  
 Received: 05 May 2022 / Accepted: 16 May 2023 / Published: 20 May 2023

Water as a European shared public good: The legal status of a vital resource, and its sui generis community property regime

Water is generally indicated as a public good that is essential for life. Within the Union water law, this emphatic qualification appears as a generic political declaration linked to the uncertain recognition of the right to water. By analysing the common private and public interests, this study argues that the restricted territorial sovereignty's theory, widely accepted for transboundary water resources, should be applied to all water resources. Water would be a shared European public good, subject to a sui generis community of property regime limiting the sovereignty of Member States over their water resources. By investigating the coherence of this community of property regime with the principle of neutrality enshrined in Article 345 TFEU, the essay suggests that the regulation of the water services would be drawn into the scope of the Treaties because of their instrumental nature in guaranteeing the exercise of fundamental rights, the social cohesion of the Union and the protection of a common public good. The idea is put forward that water services would be an emblematic case of European public services, understood as a specific development of the concept of service of general economic interest, instrumental to the implementation of the European model of society.

Defining the Organization of Municipal Solid Waste Management Based on Production Costs

A long-lasting dilemma on the efficient provision of services of general economic interest has become increasingly important in the waste management industry: competition or monopoly in municipal solid waste management. Previous literature has primarily examined the economics of scale and scope to provide an adequate response. Here, we contribute by investigating subadditivity in municipal solid waste management service costs. Subadditivity is a critical concept used to justify imperfect competition, which encourages natural monopolies where one producer will function more effectively than more firms. To test the hypothesis that a subadditivity in costs in waste management exists, we design a simulation based on empirical data for Milan, Italy. We compared the total production cost of the incumbent firm with the alternative hypothesis built by dividing the city into four areas and assigning each area to a different hypothetical firm. The results suggest that the existence of subadditivity results in 6% lower production costs, primarily stemming from business synergies, lower transactional costs, and optimization of productive resources and facilities. The evidence justifies, ceteris paribus, that the provision by a single firm is preferable to multiple firms in the analysis case. Implications for policies are straightforward. The one-fit rule approach fails to set the best condition for policymakers to create a level playing field transparently and efficiently for industry operators to perform efficiently.

Assessment of the production potential of water supply and wastewater treatment enterprises in Ukraine

The production potential of an enterprise is one of the generalized indicators that investors look for. Before the war, Ukraine had 14,000 municipal enterprises, mostly providing services of general economic interest: water, heat and gas supply, building management, household waste management, and public transportation. These enterprises are monopolists in their sectors of operation, but the level of investment in fixed assets and development is extremely low. Realizing the actuality of this problem, the object of this study is water supply and sewerage utilities. The purpose of the article is to assess the production potential based on the performance concept. The objectives of the study were to identify markers that affect the production potential of an enterprise based on the performance concept and to calculate the parameters of the linear regression equation in order to determine the statistically significant factors that affect the value of the production potential of an enterprise. Based on the analysis of literature sources, the article determines the feasibility of assessing the production potential of municipal enterprises by the following indicators: return on assets, return on equity, return on net profit, debt ratios and current liquidity ratios. After analyzing the available statistical data on municipal enterprises located in regional centers, it was determined that enterprises in this sector have low profitability. In particular, the average return on assets over the past five years was -2.93%, and the return on equity was on average -3.47%. The model of statistical data analysis showed that return on assets, return on equity, and marginal income have a positive and significant impact on profit growth, and, therefore, have a positive impact on the production potential of these enterprises. The growth of debt ratios and current liquidity ratios has a significant negative impact on the growth of profits of municipal property companies, and has a negative impact on the production potential of water supply and sewerage. The article concludes that tariffs for water supply and sewerage services should be set according to the «cost plus» model, which will allow for the renewal of fixed assets and the realization of the production potential of water supply and sewerage utilities.

REGULATION OF PUBLIC SERVICES IN THE ADMINISTRATIVE CODE OF ROMANIA: CHALLENGES AND LIMITATIONS

Background: In 2019, in Romania, a legislative event of special importance took place – the adoption of the Administrative Code. The scientific problem addressed in this article refers to the way in which the recently adopted Code realises the general regulation of public services respecting the best practices in order to create a good administration that is flexible and adaptable to the constantly changing needs of citizens today. Methods: This article investigates how the general regulation of public services in the Administrative Code is realised, taking into account the trends manifested in the field at the EU level and in comparative law. The categories of public services with which the EU operates (services of general economic interest, non-economic services, and social services of general interest) and the concept of universal service are highlighted. Then, the principles of organisation and functioning of public services in France, Germany, Italy, Spain, and the UK are investigated. In a separate section, the challenges and limitations in the regulation of local public services are analysed critically against the Administrative Code of Romania, starting from the regulation of the EU and the good practices observed in comparative law. Results and Conclusions: At the end of the article, I proposed we use the observations resulting from research on the Administrative Code to increase the degree of administrative convergence with the other member states of the EU.

Effects of Railway Market Liberalisation: European Union Perspective

Network activities are an essential part of the economy. They represent services of general economic interest and include electronic communication, electricity, postal and railway services. At the end of the 1980s, the European Commission brought forward legislative proposals to open the monopolistic service markets of general economic interest. In that way, states would prepare the legislation to liberalise services, and state-owned monopolistic enterprises would adapt to the new conditions in the market. State-owned railway companies were megalomanic, exerting a triple role of managing the railway infrastructure and service facilities and providing railway transport services. In the early 1990s, the European Union (EU) adopted new legislation that would open the railway freight transport market. This initiated a new era of the railway. Separation of the functions within state own monopolistic companies into infrastructure management and railway undertakings quickly became a reality, paving the way for new railway freight operators. EU directives are implemented differently throughout the EU, which leads to various solutions. We have analysed various scientific and professional sources to understand better different correlations between the traffic parameters of the railway freight transport market. The key parameters were: (1) number of new undertakings, (2) ton-kilometres, (3) infrastructure charges and (4) quantity of transported goods. This paper researches the current state of the railway freight transport market and aims to define the shortcomings in the analyses of the impact of railway liberalisation on freight transport. Our research pointed out the need for seeing a broader picture of state interventions and infrastructure manager independence in the context of preventing market marginalisation. In addition, we have concluded that a number of the new undertakings is not a crucial parameter for understanding the railway freight transport market.

Početak toka i trajanje jednogodišnjeg roka zastarjelosti potraživanja u obligacionopravnom i potrošačkom kontekstu

This paper analyzes some issues related to the one-year Statute of limitations for claims, from the beginning of this period and throughout its course, in the context of obligation (contract) law and consumer law relations. The focus is on reconsidering whether the length of the special one-year Statute of limitations should be changed. The author examines whether there is room for refining, specifying and amending the provisions of the Obligation Relations Act, especially pertaining to the beginning of this period, given that the legal provisions on the one-year Statute of limitations in this Act do not contain special rules on this issue. The discussion is further complicated by the fact that in the Republika Srpska, the Consumer Protection Act contains a provision on a one-year Statute of limitations for claims on services of general economic interest. Is the circle of claims or the rule concerning the beginning of this Statute of limitations different from the one prescribed in the Obligations Relations Act? The paper aims to find answers to these questions by using scientific research methods in the analysis of legislation, legal theory and case law, as well as the questionnaire techniques in the empirical research which is of both theoretical and practical importance.

Derogacja zasad konkurencji wobec przedsiębiorstw zobowiązanych do świadczenia usług w ogólnym interesie gospodarczym a zasada proporcjonalności

The model of regulatory framework for Services of General Economic Interest (SGEI) is a pivotal point in a Europe-wide political and legal debate of liberalisation versus welfare interests. The principle of proportionality is wellestablished is acquis communautaire. It requires each measure taken by the EU legislator to be based on a fair assessment and balancing of interests, as well as on a reasonable choice of means. Article 106 (2) TFEU allows the Member States to exclude certain services from the scope of the Treaty Rules. It could be perceived as a shield for public service against demands of highly competitive, liberalised market. On the other hand all decisions of Member States excluding public service provides from competition rules are subject of review for their compliance with the general principles. So the key question is whether a measure is necessary to achieve legitimate goals of general interest or whether it goes further than that. In the field of Article 106 (2) TFEU the European Court of Justice developed extensive and inconsistent case law. From very restrictive approach allowing only these measures which have been indispensible to achieve SGEI goals to a more flexible interpretation in more recent cases. This paper provides an overview of an interplay between the principle of proportionality and the policy-based measures to create preferential conditions for SGEI operators.

Transition to Circular Economy and Management of Public Services of General Economic Interest

Purpose: The aim of this paper is to clarify the topic of the transition to circular economy, an expression of the European “Green New Deal”, which has several application consequences for the SGEI sector. Approach: The approach consists of examining the European policy framework, the most relevant consequences of the transposition of the 2018 waste directives for the domestic system, the new measures for local authorities and users, and the new “purpose” of the utilities industries based on sharing and environmentally friendly solutions. Findings: The study highlights the need for several practical adjustments in the implementation of circular economy: the necessary technological innovation requirements for industrial production, reforms of the national legal framework, and an inevitable wider cultural evolution. Publications concerning the transition to circular economy in relation to public services of the general economic interest sector are not numerous in law literature. Most of the existing documents and communications are provided by the European Commission and the analyses are based mainly on the guidelines of the new green policy and the specific EU legal framework. Academic contribution to the field and originality/significance/value: The paper adds to existing research focusing mainly on legal studies of the wider consequences for national utility policy and companies’ business plans, the role of local public authorities having direct powers that need reforms, and the position of consumers.

EVOLUTION OF LEGAL REGULATION OF SERVICES OF GENERAL ECONOMIC INTEREST IN UKRAINE

The purpose of the article is to show in the historical development the formation of the institute of services of general economic interest (SGEI) in the Ukrainian legal tradition under the influence of European integration strategic actions. One of such actions is the harmonization of Ukrainian legislation with the law of the European Union. SGEI, in the context of another "legal novelty" for Ukraine as state aid as part of competition law, have changed the existing approaches to the distribution of already known subsidies and grants. A set of new rules forced the state authorities to adhere to clear rules, failure to comply with which is fraught with real sanctions. In the course of the study, it was revealed that the institute of SGEI has already found its reflection and practice in the Ukrainian legal system. But at the same time, all norms of legislation on services of general economic interest do not correspond to the practice of the EU, and legislative changes are necessary to launch reforms in this area.

On public service and service of general economic interest: a conceptual approach

The economic integration and the creation of a European common market brought as a consequence the transformation of the public service concept, making way to services of general interest (SGI), services of general economic interest (SGEI), and Non-economic services of general interest (NESGI). This paper, reviews this process of transformation from the original idea of the Bordeaux School, to the notion of service of general economic interest (SGEI), coined by European Union law.

PRAVILA EUROPSKE UNIJE O TRŽIŠNOM NATJECANJU I DRŽAVNIM POTPORAMA I DOPUNSKO ZDRAVSTVENO OSIGURANJE U REPUBLICI HRVATSKOJ: KRIVO SRASTANJE?

Competition and state aid rules are not applicable to compulsory health insurance in the Republic of Croatia, since the latter does not constitute an economic activity as defined by EU law. On the other hand, complementary health insurance, as established in Croatia, constitutes an economic activity, due to the existence of real competition between undertakings. The illustrated situation with competition in complementary health insurance market allows for the statement that special rules applicable to Croatian Health Insurance Fund (HZZO) provide the latter with a privileged position when compared to its private competitors to whom these rules do not apply. Moreover, this privileged position is strengthened by the fact that HZZO, as a legal monopolist within the sphere of compulsory health insurance, utilizes respective infrastructure in the field of complementary health insurance, which enables it to reduce expenses to the detriment of its private competitors lacking such a privilege. A solution for the described situation could be for the state to establish a separate entity to provide complementary health insurance. This entity would have to provide open enrolment and community rating, regardless of age, sex or health of the insured persons. In order to prevent private competitors from jeopardising the exercise of service of general economic interest by taking over only the insured persons with a more favourable risk profile, a risk equalisation scheme would have to be set up. This would result in a transfer of funds from insurers with a favourable risk profile to those with an unfavourable risk profile on basis of objective and clear criteria, thereby making it possible for the latter to provide service to the higher-risk insured persons like the elderly and the ones with chronic illnesses. In this way, a balance between the necessity to provide a service of general economic interest to all insured persons, including those with a higher risk, and competition on the EU internal market, would be struck.

Legal Aspects of Urban Water and Sanitation Regulatory Services: An Analysis of How the Spanish Experience Positively Would Contribute to the Brazilian New Regulation

This paper focuses on the legal and institutional framework of urban water services in Spain, emphasizing water sanitation by using proposals that would positively contribute to wastewater management in Brazil. The recent Brazilian Federal Law No. 14,026/20 aims to encourage investment in water sanitation, promoting public-private collaboration formulas so that service management is viable even in economically less-favored regions. In Spain, sanitation policies are aimed at fulfilling the set of obligations and objectives imposed by European Union Directives within the environmental policies of the Union. From an economic point of view, supply and sanitation water services are classified at European legal framework as “services of general economic interest” (SGEI), not subject to harmonized regulation and open to a natural monopoly provision regime, which they admit various types of management formulas, public and private, based on the ownership and public intervention of the service, both at national and European level. We believe that the Spanish experience in this field, beyond its singularities, can serve as a useful reference for Brazilian’s urban wastewater new regulation for several reasons: (1) Because of the decentralized political scheme that both countries share and the need to articulate an adequate system of competencies in consequence; (2) Because of the international experience that Spanish companies have at the sector’s technological forefront, they are very competitive; (3) Due to the adequate functioning of the Spanish legal and organizational framework since, despite its shortcomings, as we later will comment, it has managed to develop successful financing formulas and management models that, in general terms, have allowed to ensure with reasonable efficiency, continuity, stability and sustainability in the provision of urban water services.

Economic Activity, Market Failure and Services of General Economic Interest: It Takes Two to Tango

Economic Activity, Market Failure and Services of General Economic Interest: It Takes Two to Tango

The impact of economic policy on shipper businesses in coastal line maritime passenger transport in Croatia

Coastal line maritime passenger transport in the Republic of Croatia, as well as in other EU member states, is regulated through various regulations and legislation, which in turn result in numerous national laws and regulations that affect its development, all of which is legally binding for shippers. Scheduled maritime passenger transport is an extremely important form of transport for the Republic of Croatia since it is the only form of connection with the mainland for many islands. This paper analyses economic policy measures that affect the organization and implementation of coastal line maritime passenger transport. The paper also investigates the demand fluctuation for maritime passenger transport services. The aid measures provided by the state to individual sectors is also analysed, as well as aid for the provision of services of general economic interest. The aim of this paper is to assess the amount of aid granted to maritime transport and its importance, especially in coastal line maritime passenger transport. The paper also explains the importance of establishing the Coastal Liner Services Agency as a regulatory body of the Republic of Croatia, and it further analyses the subsidy amounts granted to shippers in the period from 2014 to 2020.

Electricity proviision as a European service of general economic interest - a conceptual debate

Today the universal and secure supply of energy is facing profound changes and challenges in European regions. Recent updates on energy policies in the EU propel the decentralization of energy generation driven by citizens’ engagement, fueling scientific debates on how inclusive these new frameworks really are. We look back at all four legislative ‘Energy packages’ of the EU (1996, 2003, 2009, 2019) with a focus on the Clean Energy Package 2019. Did the changes towards completing a common internal market for energy and reacting to the climate crisis affect standards of SGI provision, such as availability, accessibility, affordability, quality and variety?

Measure of accessibility to postal services in France: A potential spatial accessibility approach applied in an urban region

AbstractIn a context where the demand and supply of mail and parcel delivery services are undergoing major changes due to the widespread use of the Internet and digital communications, this paper focuses on the accessibility of postal services through the physical retail network. The accessibility constraints applied to the outlets network of Le Groupe La Poste (the French postal operator responsible for the universal postal service and three other services of general economic interest) are based on a “simplified” approach that considers accessibility only in terms of time or distance‐time. This paper proposes to measure potential spatial accessibility by applying postal supply and potential demand dimensions using a two‐step floating catchment area (2SFCA) analysis. Based on an equilibrium between supply and demand through distance function, this method, which is often used in studies of the accessibility of health services, is transposed and adapted into the field of postal activities. It aims to measure accessibility by taking into account the population and population/provider ratio, considering standard postal services provided at service points. While until recently the 2SFCA methods were mostly applied in healthcare contexts, some applications have been developed in non‐health‐related services over the last decade. This paper proposes an original contribution to analysing variations in the accessibility of postal services. Referring to the “primary postal services” (sales of stamps, letters or parcels postage, remittance of postal items, and so on), it outlines the conditions that activities (or services) must satisfy in order to use the floating catchment area method.

CREATION OF THE STATE AID MONITORING AND CONTROL SYSTEM IN UKRAINE AS A RESULT OF THE SIGNING OF THE ASSOCIATION AGREEMENT BETWEEN UKRAINE AND THE EU

The purpose of the article is to research the process of reforming the legislation of Ukraine in the fi eld of monitoring and control of state aid to business entities in connection with the signing of the Association Agreement and to develop proposals for necessary amendments to the Ukrainian legislation in order to align it with the EU acquis.The statistical analysis shows the ineffi ciency of functioning of the state aid system to business entities in Ukraine. According to Association Agreement between Ukraine and the EU, Ukraine has undertaken the obligation to establish a system of state aid monitoring and control. Thus, Ukrainian legislation in this fi eld has developed signifi cantly.The adoption of the Law of Ukraine «On State Aid to Business Entities» has become a signifi cant event. Due to the rapid process of reforming the legislative framework, there is a need for a more detailed research and legal analysis of the State Aid Institute, which proves the relevance of the topic.However, some legislative changes need to be made in the fi eld of monitoring and control of state aid to business entities in order to eliminate signifi cant inconsistencies with EU acquis.The comparative-legal, formal-legal method, the method of generalization and interpretation are used.The practical value of the article is to develop proposals for legislative changes due to the inconsistency of the legal provisions of the Law of Ukraine «On State Aid to Business Entities» and the provisions of the Association Agreement between Ukraine and the EU. In order to avoid contradictions, there is a need to supplement the concept of state aid. The current defi nition of state aid creates grounds for expanding the application of the rules on state aid monitoring and control. It is proposed to supplement the concept with the characteristic «impact on trade between Ukraine and EU Member States».Suggestions to change the approach to identifying services of general economic interest have also been made. In particular, we propose to implement the universal Altmark criteria and to establish them at the level of the Law.